Cosatu Calls Out Nersa for Insensitive Tariff Hike and Wants Eskom CEO to Stay for Now

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  • Trade union Cosatu spokesperson Sizwe Pamla says that the National Electricity Regulator of South Africa (NERSA)’s approval of an 18%  increase in electricity tariffs, from 1 April 2023, is insensitive and careless.
  • She also said that while they (Cosatu) are not impressed with de Ruyter’s performance, he should be kept on the job until a new CEO is found.
  • De Ruyter resigned last month and will leave Eskom at the end of March 2023.
  • Cosatu has more than 1 million members and is the largest and strongest trade union federation in South Africa.

Yesterday NERSA approved an 18.65% electricity tariff hike for the country’s state owned energy utility, Eskom, effective from 1st April for the 2023 financial year. A 12.74% tariff hike was approved for 2024 which brings a total price increase for the next two years at 33.7%.

Eskom has unsustainable debt of around R400 billion and cannot meet the country’s electricity demand. In October last year the Finance Minister announced that government will be taking on between one-third and two-thirds of Eskom’s debt to try a turn the beleaguered utility around. Decades of gross mismanagement, poor planning, corruption, sabotage and theft have brought the utility to its knees. The people of South Africa face stage 6 blackouts daily. Read more

“We expect government to rather extend the outgoing CEOs tenure until the process of appointing a permanent replacement is finalised,” said Pamla.

Citing no support from the new board and facing accusations of ‘agitating to overthrow the state’ from the country’s Energy Minister, Gwede Mantashe, Eskom CEO, Andre de Ruyter, resigned last month. The outgoing CEO has also laid an attempted murder charge with the South African Police Service, after drinking a cup of coffee laced with cyanide at his Eskom office. Read more

De Ruyter’s will leave Eskom at the end of March along with Chief Operating Officer, Jan Oberholzer.

Pamla’s comments come as the government plans to have Eskom to fall under the Ministry of Energy rather than the Ministry of State Owned Enterprises (SOE) where it currently sits. The country’s president, Cyril Ramaohosa, annouced that the move was a clear mandate from the ANC party’s elective conference where he secured a second term in office. Read more

“The electricity price hike will be a devastating blow to workers and businesses struggling to survive in an economy that is still reeling from Covid-19 lockdowns and rampant inflation. We reiterate our call for government to relieve Eskom of at least two thirds of its debt burden and allocate additional funding for Eskom to purchase diesel to help reduce loadshedding in the 2023/24 budget due to be tabled at Parliament next month.

The Department of Mineral Resources and Energy needs to grant  Eskom the diesel import license it has long been calling for, which will help it to effect significant savings. We are worried that law enforcement agencies are struggling to prosecute those have stolen billions from the power utility.

If government does not address these root causes of Eskom’s crises, then we will see Eskom return to NERSA by June asking for additional double digit tariff hikes.

The power utility should expedite the process of appointing a new scenario and avoid the previous mistake of allowing the acting board chairperson to act as a CEO. This distorts and dilutes accountability and leaves the organisation in limbo. We expect government to rather extend the outgoing CEOs tenure until the process of appointing a permanent replacement is finalised. The shoddy governance and poor management systems at Eskom are the root cause of the ongoing crisis.

The ANC government’s ongoing mismanagement of Eskom will be its undoing”, concluded Pamla 

Author: Bryan Groenendaal


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